Boeing to slash 17,000 jobs due to worker strike and financial losses | Business News
Boeing will reduce its workforce by 17,000 jobs – equivalent to 10% of its employees – as it faces various challenges within its business.
In an email to staff on Friday, CEO Kelly Ortberg announced that the job cuts will impact executives, managers, and employees.
Ortberg stated that the downsizing is essential to “align with our financial reality” following a strike by 33,000 workers on the West Coast of the United States, which halted production of Boeing’s 737 MAX, 767, and 777 jets.
The company also revealed that the rollout of the new 777X plane will be postponed to 2026 from the originally planned 2025, and production of the cargo version of the 767 jet will cease in 2027 after fulfilling current orders.
“While our business is currently facing challenges, we are making strategic decisions for our future and have a clear plan to restore our company,” Mr. Ortberg affirmed.
Boeing factory workers on a picket line in Renton, Washington. Pic: Reuters
The company had previously implemented temporary furloughs, but Ortberg announced that these will be stopped due to the impending layoffs.
Boeing has incurred losses exceeding $25 billion (approximately £19 billion) since the beginning of 2019, with the strike by workers directly contributing to financial losses.
Pic: Reuters
Following two days of unsuccessful talks with the workers union, which commenced on 14 September regarding pay disputes, Jon Holden, the lead negotiator for the International Association of Machinists and Aerospace Workers union, stated that members are prepared for prolonged negotiations after the company provided minimal concessions before ending discussions.
In a preliminary report on its third-quarter financial results, Boeing reported a cash burn of $1.3 billion (£994 million) during the quarter and a loss of $9.97 per share.
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The company also had a court appearance in Texas on Friday after pleading guilty to a criminal fraud conspiracy charge in July following investigations into two fatal 737 MAX crashes.
A judge will assess the plane maker’s proposed $243.6 million (£187 million) fine and commitment to invest at least $455 million (£348 million) over three years to enhance safety and compliance programs as part of a plea agreement.
This incident adds to the string of issues with the 737 MAX, as the fleet was grounded earlier in the year for about three weeks after a door panel dislodged on a new aircraft mid-flight.
